The chancellor's stamp duty changes will give a strong boost to property sales during the crucial spring market, estate agents said this week, though anyone hoping to sell a home for £260,000 would have no hope of finding a buyer.

The new rules give an immediate stamp duty holiday to any first-time buyer paying less than £250,000 for a property. The rate was formerly 1% on homes between £125,000 and £250,000, so the temporary removal of the tax for two years will save a buyer up to £2,500.

The move would make about 70% of properties for sale free of tax, said Miles Shipside, of Rightmove, the UK's biggest internet property site. But house prices may rise to reflect the tax holiday, as sellers will be less keen to negotiate cuts.

"This initiative removes the majority of properties for sale from the clutches of a somewhat restrictive tax, giving a welcome boost to the spring market.

"However, sellers may feel they have to negotiate less with a buyer who is a couple of thousand pounds better off."

The distortions in the pricing of property caused by stamp duty will only be deepened by this week's changes, said Drew Wotherspoon, of the mortgage brokers Charcol. For the next two years, properties under £250,000 will carry a zero levy, while those over £250,000 will be charged at 3% on the total value of the sale. "No one in their right mind would put a property up for sale at £260,000 currently but a property that was bought for £200,000 and has increased in value by 30% is worth £260,000. The fact that you could never sell it for that is simply wrong. Someone should address this urgently," he said.

Santander, which includes Abbey and Alliance & Leicester, said the cut could benefit as many as 3.8 million potential first-time buyers. But Rightmove warned that the savings would not be enough to overcome first-time buyers' biggest challenge: saving the larger deposits that lenders demand.

Financial adviser Justin Modray, of candidmoney.com, said: "Whether it's enough to kickstart the housing market remains to be seen. Property sales over 2009 were under half those in 2007, suggesting many potential sellers are sitting on the fence."

The anticipated £520m loss in revenue to the Treasury from the stamp duty holiday will be partly offset by a rise from 4% to 5% in the duty on homes bought for more than £1m. But rather than killing the market for "prime" property, experts are predicting a new boom, as buyers and sellers have a year to beat the deadline before the new rate is introduced.

Patrick Stevens, tax partner at accountants Ernst & Young, said: "This is likely to encourage sales before the implementation date, giving a boost to the top end of the housing market and potentially providing a welcome short-term boost to exchequer revenues."

London Central Portfolio, a firm of property investors, hailed the rise as a good reason to buy. "The budget is likely to boost interest in central London as investors rush to get in before prices reach £1m. This is likely to be an additional stimulus to a market already rising due to the improving global economy, the weakness of sterling and the increasing availability of debt."

This view appears to be confirmed by Treasury forecasts of a £90m rise in stamp duty revenue on £1m-plus properties in the 2010-11 tax year, even before the new rate comes into force.

But Peter Rollings, managing director of estate agent Marsh & Parsons, said: "The chancellor's measures are not going to help first-time buyers looking for property in central London. His changes are just going to tax Londoners and the south-east, where property prices are proportionately higher, harder. Only 3% of the homes we have for sale fit into the sub-£250,000 category.

"Admittedly, central London may not be typical first-time buyer territory, but it's little wonder why. Mortgage lenders now typically require a 25% deposit from first-time buyers, meaning they would need to put down over £84,000 to purchase the average London property – realistic for only the tiny minority with substantial parental assistance," he said.